The UK-listed banking giant experienced a fall in profits as it continued its “non-core” rundown.
Barclays saw its pre-tax profit fall 21 per cent year-on-year to £2.06 billion ($2.7 billion) in the first half of 2016 as it continued to sell off business units globally.
The decline was largely due to pre-tax losses of £1.9 billion in the bank’s “non-core” businesses. Barclays logged an impairment of £372 million on the assets of its French retail, and wealth and investment management businesses. The bank is in exclusive talks with AnaCap Financial Partners for the potential sale of these businesses.
The second quarter saw the completion of the sale of Barclays’ retail banking, wealth and investment management, and parts of its corporate banking business in Portugal. It has already sold off its Americas wealth business and earlier this year agreed to sell its wealth and investment businesses in Singapore and Hong Kong in a deal with Bank of Singapore, part of OCBC. In May, the bank started the sale of 12.2 per cent of its stake in Barclays Africa. Other sales include some services in locations such as Gibraltar, Malta and Cyprus.
Pre-tax profit from the bank’s core businesses, which include Barclays UK and Barclays Corporate & International, increased 19 per cent year-on-year to £3.97 billion. Operating expenses dipped 10 per cent to £7.697 billion, though this was partially offset by restructuring costs.
“Taken together, the picture in the second quarter is one of strong and accelerating progress against our strategy. We remain confident that it is the right plan for Barclays, and see no reason to adjust it, or the pace of delivery, in light of the vote by the UK last month to exit the EU,” James Staley, group chief executive of Barclays, said in the statement.
“Given the inherent diversification of our business model, coupled with a longstanding conservative approach to risk, Barclays is well positioned to weather any potential economic consequences of that decision. We are very much open for business, and fully committed to supporting our customers and clients, and the real economy, through this period of uncertainty.”
Barclays’ common equity tier one (CET1) ratio increased to 11.6 per cent, from 11.4 per cent in December, while its CET1 capital increased £1.6 billion to £42.4 billion.